Meta Revenue Falls Despite Facebook Attracting More Users

After seeing its stock plunge more than 60 percent this year, Meta Platforms posted another decline, with Q3 revenue falling 4 percent, to $27.7 billion, from $29 billion for the same period last year. CEO Mark Zuckerberg told analysts that on a constant currency basis “total revenue grew slightly this quarter,” adding that “we’re still behind where I think we should be, but we believe that we will return to healthier revenue growth trends next year,” though just in case “we’re planning our budget somewhat more conservatively.” Meanwhile, Facebook’s number of daily active users hit 1.98 billion, a 3 percent gain year-over-year.

Zuckerberg told analysts that the number of people using Facebook each day “is the highest it’s ever been,” and that the company’s family of apps now reaches more than 3.7 billion people monthly, with North America the fastest growing region.

Globally, WhatsApp is topping 2 billion DAUs, and Instagram clocking “more than 2 billion monthly actives.” Across the family of apps, advertising revenue was down 4 percent, to $27.2 billion, “but up 3 percent on a constant currency basis,” CFO David Wehner said.

Net income was $4.4 billion, a 52 percent drop from a year earlier due in part to a 19 percent spending increase. “The company’s metaverse investments remained troubled,” wrote The New York Times, noting that Reality Labs, the virtual reality and augmented reality unit, “lost $3.7 billion compared with $2.6 billion a year earlier.” Wehner said the cost is due to investing in new hardware development.

Earlier this month Meta unveiled the $1,499 Quest Pro, a VR/AR headset aimed at power gamers and business users. Wehner said Meta will release its next generation consumer Quest headset in late 2023. “Existing headsets like the Quest 2 are aimed to immerse average people in the company’s dreams for the metaverse,” writes TechCrunch.

“There’s still a long road ahead to build the next computing platform. But we’re clearly doing leading work here. This is a massive undertaking and it’s often gonna take a few versions of each product before they become mainstream,” Zuckerberg told analysts, describing the company’s work as “of historic importance” and “the foundation for an entirely new way that we will interact with each other and blend technology into our lives.”

Yahoo! Finance characterized the metaverse pitch as a “plea for ‘patience,’” and said it fell “flat.”

The company continues to invest in AI, specifically the discovery engine that’s “powering Reels and other recommendation experiences, our ads and business messaging platforms, and our future vision for the metaverse,” Zuckerberg said. Reality Labs losses are forecast to “grow ‘significantly’ next year,” NYT reports, noting “the company’s shares fell more than 19 percent in after-hours trading” following the Q3 numbers.

In a tech trend piece, The New York Times reports that companies from Google to Microsoft are “sending worrying signals about the economy” regarding inflation and ad sales, with expectations for a general “slowdown through at least the end of the year.”

Related:
Facebook Parent Meta Shares Fall to New Multiyear LowsThe Wall Street Journal, 10/27/22
Meta’s Instagram Users Reach 2 Billion, Closing In on Facebook, Bloomberg, 10/26/22

No Comments Yet

You can be the first to comment!

Sorry, comments for this entry are closed at this time.